Yesh Atid leader says he refused, when finance minister, to pass tax amendment to aid PM’s associates, claims his party served as ‘last barrier against government corruption’

Amid a political firestorm as police recommended indicting Prime Minister Benjamin Netanyahu for corruption, Yesh Atid party leader Yair Lapid — revealed to be a key witness in one of the cases against the premier — confirmed and explained his testimony Tuesday night, saying his party had served as the “last barrier” against government corruption.

According to media reports on Tuesday evening, Lapid — a former finance minister under Netanyahu and now his political rival — provided police with critical evidence that the prime minister pushed to extend a law that gave his benefactors millions of dollars in tax breaks.

In a statement about what has come to be known as Case 1000, police said that in return for gifts from Israeli Hollywood mogul Arnon Milchan and others, Netanyahu sought legislation to extend by a further 10 years an existing 10-year tax exemption for returning Israelis on income earned abroad — which could have saved Milchan further millions of dollars.

“Police contacted me and asked me to give testimony about my time at the Finance Ministry. Like any law-abiding citizen, I gave them a short testimony, which touched on the attempt to extend the ‘Milchan Law’ (on tax exemptions) to 20 years.

“I will emphasize that despite all the pressure, I refused to pass the law,” he said.

“In this instance as in other instances, Yesh Atid was the last barrier against government corruption, in the face of politicians occupied solely with themselves and their own well being.”

Hadashot TV news said Lapid testified that Netanyahu asked Lapid, who was finance minister at the time, whether he had discussed the amendment with Milchan. When Lapid said he had, but that he had reservations over the legislation, Netanyahu responded that he thought it was “a good law,” the TV report said.

It said the Netanyahu-Lapid-Milchan episode was one of the key elements of the case, since it allegedly showed the prime minister attempting to intervene in legislation to benefit Milchan financially.

Responding generally to the police recommendations, Lapid said: “Even if the letter of the law doesn’t obligate the prime minister to resign, in a proper country a person accused of such serious allegations… cannot continue to serve as prime minister.

“There is no way to manage a country while you are fighting such serious suspicions.”

Government ministers attacked Lapid’s key role in the case against Netanyahu on Tuesday.

Tourism Minister Yariv Levin said it was “shameful that the key witness against prime minister Netanyahu is poltiican Yair Lapid, who has for years sought to replace him.”

Culture Minister Miri Regev said Lapid “decided to join guillotine-happy crowds” who have been protesting against the prime minister in Tel Aviv “in order to try and bring down Netanyahu through anti-democratic means.”

Coalition chief David Amsalem called him a “shtinker” — similar to a snitch.

However, Mickey Levy, a former senior police officer and now an MK in Lapid’s party, said Lapid was legally obligated to testify when required to do by police. “Not to testify would have been unlawful,” Levy said.

Prime Minister Benjamin Netanyahu, his wife Sara (C) and their son Yair seen with actress Kate Hudson at an event held at the home of producer Arnon Milchan (right), March 6, 2014. (Avi Ohayon/GPO/Flash90)

Netanyahu himself dismissed the police recommendations as slanderous, “unfounded” and “outrageous.”

The police recommendations will now go to Attorney General Avichai Mandelblit, who will have to decide whether to indict Netanyahu on any or all of the suggested charges.

Police issued their recommendations Tuesday for the Israeli leader’s indictment in two lengthy corruption investigations, known as cases 1000 and 2000.

In Case 1000, Netanyahu and his wife, Sara, are alleged to have received illicit gifts from billionaire benefactors, including hundreds of thousands of shekels’ worth of cigars and champagne from the Milchan.

Case 2000 involves a suspected illicit quid-pro-quo deal between Netanyahu and Yedioth Ahronoth newspaper publisher Arnon Mozes that would have seen the prime minister weaken a rival daily, the Sheldon Adelson-backed Israel Hayom, in return for more favorable coverage from Yedioth.

In total, the prime minister is said to have accumulated over 1 million shekels ($282,000) in illicit gifts. He denies any wrongdoing.